Western Australian promoters of a rent-to-buy property scheme have settled to pay $70,000 compensation as settlement of Supreme Court action by Consumer Protection.
Presto Property Solutions and its director Rowan Amanda Lines admitted to making false and misleading representations to three prospective buyers in 2010.
The company and its director had placed advertisements in Quokka and on Gumtree making claims such as 'I buy houses fast' and 'No banks' with similar signs posted on light poles in Perth.
Presto Property Solutions and Ms Lines are prevented for two years from representing to potential vendors that they purchase properties when they do not, or to potential vendors that they own properties without the freehold title.
Acting commissioner for consumer protection Gary Newcombe said this was a good outcome for the consumers who claimed they were misled when they signed up to the deal.
“We urge consumers to exercise a high degree of caution before entering into a rent-to-buy arrangement, as buyers who default on their tenancy agreement or can’t get finance to buy the property at the end of the option period are at risk of losing the deposit they paid and the money that was intended to go towards the purchase of the property,” he said.
“Consumer Protection has taken numerous actions against property promoters who have made misleading statements and engaged in deceptive conduct in order to attract people who are often desperate to sell or buy property.”
Mr Newcombe advised that consumer should not be pressured into signing any contracts and should conduct their own research with independent financial and legal advice prior to committing to any deal.
“Our actions against promoters of rent-to-buy schemes and the Court outcomes that we have achieved should send a clear message to the industry that they need to act fairly with consumers or face the consequences.”